Security Finance and its affiliates have a track record of trouble with the law. In one case handled by Humphreys Wallace Humphreys, we established Security Finance affiliates engaged in a loan flipping scheme, trapping customers in debt. In that case, Security Finance did not tell their customers, they intended to: (1) renew the customer’s loans every 60 days; (2) interfere with the customer’s contractual right to pay off the loan in monthly installments; (3) renew the loan in order to prevent payoff; (4) prevent the customer from ever paying off the loan; (5) prevent loan payoff by methodically increasing the loan balance; (6) force the customer to renew the delinquent loan once the customer falls behind.

We further established that Security Finance employees were instructed to “gang up on the customer” if the customer refused to renew the loan, and not to take “no” for an answer when “selling” a loan renewal. Further, Security Finance monitored and enforced the loan renewal practices by (1) giving employees renewal quotas; (2) pressuring employees to renew loans; (3) threatening employees with termination for failure to renew loans; and, (4) training employees to sell renewals by using half-truths, concealment, and outright fraud, including misrepresenting the actual cost and supposed advantages of loan renewal while concealing the disadvantages. As a matter of policy, the company does not point out the whole truth or any of the disadvantages of renewing.

Getting physical with customers, by pushing or blocking their movement;

Entering their place of work even knowing such visits were not allowed by the borrower’s employer;

Repeated and harassing visits to consumers’ homes and places of employment, as well as the homes of their neighbors;

Contacting and taking payments from consumers where others parties could see or overhear, such as on a doorstep within earshot of neighbors, on a speakerphone in public, in the middle of a grocery store, through drive-thru windows at fast food restaurants, in line at a big-box retailer, and in other public locations;

Repeated and continuous collection calls to borrowers place of work, despite knowing such calls were harassing not just to the borrower, but to the borrowers’ co-workers and managers;

Handing “field cards” to third parties, including consumers’ young children, neighbors, and others for delivery to consumers;

Threatening customers with jail;

Calling and continuing to call and harass credit references, supervisors, landlords, family members, and suspected family members (a) in a manner that disclosed or risked disclosing the existence of delinquent debt to third parties, or (b) when Respondents knew or should have known that the consumers or the third parties had previously requested that the calls cease;

And, many times continuing these wrongful collection actions knowing of the embarrassment, harassment, and harm at work they were causing.

Also, Security Finance and its related lenders failed to truthfully report to the credit reporting agencies payments made by consumers, accurate account balances, or consumer disputes of false reporting. Security Finance had no written policies in place to properly report accounts. Because of known company-wide problems throughout its 900 plus branches, Security Finance finally decided to stop reporting accounts entirely instead of making accurate updates to reflect the true credit history of its customers.

Why would Security Finance agree that it did all of these terrible things to its borrowers? Maybe because it got away with a light wrist-slap, agreed to “change its ways” and paid a fine to the Agency with NO REPAYMENT OR RESTITUTION TO THE VICTIMS OF ITS WRONGFUL COLLECTION AND CREDIT REPORTING PRACTICES. How did Security Finance get away with it? Maybe because the new CFPB agency head, Mick Mulvaney, lives in and was the former congressman representing the same South Carolina congressional district where Security Finance is headquartered? No harmed consumer has received anything yet. You have to take action on your own if you are a victim of these collection practices.

Humphreys Wallace Humphreys

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